Nonprofit is a Tax Status!
Nonprofit organizations are exempt from paying federal taxes in many countries. But, that doesn’t mean they should be exempt from operating like businesses.
I have been speaking and writing on this topic for a long time, so I especially enjoyed Marc Chardon’s Huffington Post article called, “Nonprofit Trends: Tax Status vs. Business Model.” Hallelujah!
Chardon, the president and CEO of Blackbaud (software and service supplier to nonprofits), says, “It’s important to remember that this tax status shouldn’t be confused with a business model or the need to operate efficiently. It’s a pet peeve of mine when I ask – as a board member, a donor or volunteer – why something is done the way it is, and the answer is ‘we’re a nonprofit.’ Too often, this phrase is used to explain away inefficiencies. I’m not going to say, ‘That isn’t good business,’ as my nonprofit friends may take offense. What I will say is that it’s not good organizational practice.”
Well, having worked on the “inside” of the nonprofit world, I will say it. Bad business practices are bad business practices – nonprofit status or not!
Nonprofit board members do not have to check their business brains at the boardroom door. In fact, please don’t! You’re there as overseers and strategic guides. You’re there to question and prod – not to be a pain in the butt – but, to be accountable to donors and supporters. You are certainly not there to rubber stamp everything the senior management team does. Now, that’s not good business.
As for marketing in this sector, my standard line is: No marketing. No money. No mission.
Chardon continues, “Nonprofits that were previously all about their cause, their work, their mission, have figured out that they have brands. They have learned that brands have significant value to supporters and the web is the perfect channel to convey the brand promise, and that ‘marketing’ isn’t just about publications and communications. It’s about storytelling. It’s about giving the supporter a chance to interact with your brand.”
And, I’ll take it one step further. Every single touchpoint with a nonprofit is a BRAND touchpoint. And, that means every single employee and volunteer in those touchpoints should have a solid understanding of branding and its importance to the sustainability and growth of the organization. Customer service and engagement are two of the most important areas.
So, thanks to Chardon for reminding his nonprofit readers of this important message. Help us get it out by sharing this post and his article. It’s time the paradigm shifted for all nonprofit organizations so they can achieve even more of the good work they do.